State of the Industry-Automotive
Last week, we covered some trends in the gas station industry in the state and nationally based on the recently released statistics from 2022 Annual Business Census gathered by the US Census Bureau. This week we'll dive into the automotive industry.
There are 2,696 dedicated auto mechanical repair shops in the state. That's a slight uptick after a drop during covid. Over the last 25 years, the total number has declined by 14.6% (461 fewer shops). The real number of locations is higher, since most of the 1,188 gas stations without c-stores have a repair shop. These dedicated shops employ 10,178 people at a $511 million total payroll, for an average annual salary of $50,219. While the average salary at gas stations has been level for the last 25 years when adjusted for inflation, at repair shops the number is up about $2,000 a year from 5 years ago, even after inflation.
Sometimes these shifts are not purely the result of shops being built from scratch or closing and being replaced with another type of business. A gas station with a repair shop that closes its pumps becomes one fewer gas station but one more mechanical repair shop, even if ownership remains the same. Over the last decade, the total number of shops in the state has dropped 1.2% in the aggregate, though some areas have seen much more dramatic shifts. Some rural counties like Salem, Warren, Sussex and Cumberland have seen double-digit increases (as has Somerset). Meanwhile Hunterdon, Hudson, Monmouth, and Bergen counties have seen declines of 9-11%.
76% of mechanical repair shops have less than 5 employees, while 18% have 5-9. 39% are organized as s-corps, 23% as an individual proprietorship, 20% as c-corps and 18% as partnerships.
Nationally, there are 92,938 mechanical auto repair shops, employing 419,790 people with a $20.8 billion payroll. 91% have under 10 employees. Compared with other states, NJ runs in the middle of the pack for growth over the last decade, with a net decline of 1.2%, better than Pennsylvania's 1.9% drop or New York's 3.8% drop. Florida, Texas, Nevada, and Arizona have seen the biggest increases to match their growing populations.
Dedicated oil change and lube shops in the state are at 129 locations, down from a high of 155 in 2009. Auto body shops are at 1,073, a 19% decline over 25 years. Despite that drop in shops, the total number of people employed at body shops has actually increased slightly. 53% have under 5 employees compared with 76% of mechanical repair shops. The average annual salary for body shop employees is $8,300 higher than at repair shops.
Towing businesses have seen a jump, up to 322 statewide, from 272 5 years ago, as both new businesses have opened and some repair/towing businesses have shifted to focusing on towing. It's a 55% increase since 1998. Average salaries are lower than for repair or body shops, but they have increased $2,500 a year (after inflation) in the last 5 years.
The number of car washes has also increased, now at 652. The number had seemed to peak in 2018 and had been declining, but jumped back up in 2022. There are about 33% more car washes in the state than 25 years ago, and the average annual salary has increased by $7,300 even after inflation.
Auto parts and accessories stores have grown for three years in a row, after years of steady declines. There are 686 now, still a decline of 26% since 1998. If you've noticed a decline in the quality or knowledge of the employees at these businesses, it may be because, after inflation, the average salary has dropped 23% over that time period. Tire dealers make up an additional 433 locations, holding steady for the last decade and up 15% from 25 years ago.
Overall, this amounts to nearly 6,000 businesses in New Jersey employing over 36,000 people for $1.6 billion annual payroll.
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